All Forum Posts by: Jody Greenberg

yeah, sort of.  The explanation was a bit hand-wavy, and not super convincing.  But I did end up using them to do the cost segregation on 2 smaller buildings, and they made manual corrections to make the totals more reasonable, so their customer service was good.

My thoughts after doing a couple are: I don't have that much faith in these database based cost seg studies.  The fact that manual corrections are necessary tells me that the automated database method can't be that accurate.  They are basically just an insurance policy in case you get audited.  I could probably do just as accurate of a rough estimate of 5 and 15 year property totals...in fact probably even better because I know much more detail about the buildings than they take into their analysis.  However, you get a sheet of paper that says this is based on XYZ, etc., and an outside party to back you up.  What are the odds you get audited?  I have no idea, so I don't know if paying for these "insurance policies" is worth it or not.  I'm going to use Titan Echo for a full cost seg on a larger 8 unit building, as the cost difference for using the automated version and doing a full engineering analysis (as long as I do the onsite data collection myself) is not that different.  I will then be able to compare those results and that process to the automated version.  I expect it should be much more meaningful.

With the automated analyses, you only get useful totals of 5 year and 15 year property.  So if you want to be able to depreciate items independently, and write off retired/disposed items, then you need the full detailed study.  But for small multifamily, that's not necessary, so it seems fine.

@Lee Ripma

Yeah, well 20-25% of total basis that can be depreciated faster generally sanity checks for multifamily residential when you go through the ballpark costs of the items in the building.  That's why the 42% seemed like a red flag.  Anyway, I sent them an email to see if they could explain that result.

@Lee Ripma

Thanks for the comparison.  I did the "free" estimates on KBKG and DIYcostseg, and got very different results.  I expected something (from everything I've read) on the order of maybe 15-25% of the total improvement value to be able to be moved to faster depreciation schedules.  KBKG came up with something in that range, while DIYcostseg came up with 42%.  That seemed really high to me.  It's an older 5 unit multifamily, and the 42% equates to about $250k.  I'm pretty sure I could gut and remodel almost all the stuff that would qualify for faster depreciation for about $150k, and that's replacement cost.

From your experience did the valuations sanity check?  Did you see any big differences between the different platforms?

Anybody have any experience with Titan Echo?  That one seems to be maybe more complicated than the other two, as they seem to want you to sign up for some sort of learning module first, and I don't find their website very clear.  So I'm wondering if it's much more involved (which could be good or bad).  It seems to be cheaper ($500) for larger properties (>$500k basis), whereas DIYcostseg jumps to $1300 over 4 units.  KBKG claims to support only up to $500k basis, although they indicated to me that might be a little flexible.

I'm wondering if anyone has any experience with using the platforms from KBKG, DIYcostseg, or titan echo.  I'm going to try one of the three on one of my recently purchased multifamily properties. 

I've already gone through all the tax analysis for my particular situation, and know that it will be quite beneficial with a reasonable discounted after-tax cash flow model. However, I'm trying to see if anyone has any particular experience using any of these 3 options, or even better, if anyone has used more than one and can offer some comparison. 

I have a whole portfolio that I need to do retroactive cost seg on, but want to use this first property as a test run. I did get a quote from KBKG to do the whole thing for me, but it seems unnecessary to pay 4x the price when it appears all they will do is essentially use the same estimation software and then fill out the tax forms.